Building a recovery

By some national measurements, the housing recovery is starting, but the national statistics obscure the many people and places being left behind. Slowly rising home prices and slowly decreasing foreclosure starts nationally are two encouraging signals.

But if my head is in an oven and my feet are on a block of ice, on average I'm comfortable. Looking at specific localities reveals different stories: concentrated pain in some places, and a quick return of affordability challenges in others.

A few examples show where the foreclosure crisis is still hitting hard and how concentrated the pain is. In San Bernardino County, one in every 483 homes is in some stage of foreclosure, according to RealtyTrac's August 2013 data. But within the county in Oro Grande, it is one in every 136 homes. In Ohio's Cuyahoga County, the rate is one in 320 homes, but in the Euclid area within the county, it is one in 179. In Florida's Miami-Dade County, the rate is one in 264, but in the city of Homestead within the county, it is one in 140. Nationally, half of foreclosures are concentrated in just 10 percent of census tracts.

Those foreclosures mean families leaving their homes, which can disrupt parents' jobs, kids' school, families' health and more. When many foreclosures are close together, home values fall, vacancies and crime increase, local governments struggle to keep up needed services and the cycle of disinvestment becomes hard to break. With coordinated response and much federal support, communities are responding, but it is a very heavy lift.

Contrast Santa Ana, California, the country's third most expensive market both for homeownership and rental housing, according to the Center for Housing Policy's Paycheck to Paycheck ranking. The foreclosure rate is just one in 960 homes. However, an average police officer does not earn enough to afford the $1,621 HUD Fair Market Rent for a two-bedroom apartment, nor does the average nurse, elementary school teacher, retail salesperson or janitor. The 2013 median home price of $497,000 is absurdly out of reach. These costs are rising quickly, far faster than incomes: between 2012 and 2013, the income required to buy a home rose by more than 21 percent.

As the housing recovery builds and, hopefully, spreads to more areas, housing will become even less affordable for many families. The problem is most pronounced in places that have strong local economies but many barriers to creating affordable homes, either for purchase or rent. Zoning restrictions, direct local opposition to new housing, even parking requirements all can block the supply of housing from keeping pace with demand.

That's why we need concerted effort now at the federal, state and local level to preserve and expand affordable housing, particularly in areas that are recovering.

Federal housing programs like the Low Income Housing Tax Credit, the HOME block grant to states and localities and Section 8 rental assistance are essential, particularly for vulnerable Americans.

But shrinking federal subsidy alone cannot keep pace with rising housing costs. States and localities need to reduce the costs of development and encourage preservation of existing affordable housing.

The Center for Housing Policy and the National Housing Conference suggest many proven strategies at HousingPolicy.org, such as removing regulatory barriers, leveraging public and private capital sources and expanding availability and density of development.

With effort at all levels of government, we can make sure fewer are left behind as housing recovers.